Issue Brief: Labor and Workplace Safety
Introduction
Calvert believes that companies with strong workplace policies and comprehensive labor and safety programs tend to perform better than their counterparts. Conversely, Calvert believes that unsafe work environments, unfair labor practices, and poor wages and benefits have negative effects on a company's ability to attract and retain talented employees, while also damaging the company's public image and reputation.
Therefore, Calvert prefers companies that comply with federal and state regulations regarding wages, hours, child labor standards, and other conditions of work. Calvert avoids companies with a pattern of violating fair labor practices and occupational safety and health regulations. Calvert also avoids companies that are subject to serious action by US regulatory agencies such as the Occupational Safety and Health Administration.
Calvert's Approach
Calvert's labor relations criteria cover fair labor and employment practices; workplace safety and health; quality of work life; and international labor relations:
Fair Labor and Employment Practices: Calvert prefers companies that have positive labor-management relations and participation by employees. For US companies with union representation, Calvert avoids those firms with egregious National Labor Relations Board (NLRB) violations or a pattern of anti-union practices.
Workplace Safety and Health: Calvert avoids companies with patterns of workplace safety negligence, preferring companies with stringent safety standards and management systems, extensive and ongoing safety training, and employee-management safety teams. Calvert also urges companies to develop standards and policies to address workplace violence, to establish ergonomic standards and programs, and to promote employee health and wellness.
Quality of Work Life: Calvert prefers companies with workplace policies, programs, and benefits that boost employee morale, workplace productivity, and worker development.
International Labor Relations: Calvert's workplace criteria apply to companies throughout the world. Calvert therefore uses internationally recognized worker rights, as defined in the basic conventions of the International Labor Organization (ILO), to evaluate company practices. Fundamental labor rights include freedom of association and protection of the right to organize; right to bargain collectively; a minimum age for the employment of children; a prohibition against forced labor; lack of employment and occupational discrimination; and equal compensation.
Criteria in Practice
Cisco Systems (CSCO) has a strong reputation for effective and fair workplace safety and labor relations practices. The company's Environmental Health and Safety Department manages Cisco's Injury and Illness Prevention Program through health and safety training and planning, safety assessments, crisis management, and accident investigation. Cisco promotes employee health and wellness in a number of ways, including an ergonomics program designed to reduce employee fatigue and discomfort while increasing employee satisfaction and productivity. Cisco also publicly discloses its annual health and safety goals. The company offers its employees flexible work schedules, along with career training and development opportunities. A newly established employee satisfaction survey ("Cisco Pulse Census") helps gauge worker morale and provide other useful indicators. As a member of the UN Global Compact, Cisco supports the ILO core standards and requires its suppliers to do the same with their employees. The company was active in founding the Electronic Industry Code of Conduct.
Costco Wholesale Corp. (COST), which operates membership discount warehouse stores, provides excellent employee benefits in a flexible, cafeteria style that allows each individual to augment a core package. Even part-time employees receive some benefits. At the same time, Costco pays some of the highest wages in the industry, while Costco's CEO has a relatively low salary compared to his peers. The company's egalitarian management style encourages workers to learn a variety of jobs so that they can eventually fill in for one another. Costco also strives to promote from within the company. In a New York Times interview, the company's CEO stated that he believes it is good business to treat employees well and eliminate salary disparities.
Know What You Own®
Calvert's Know What You Own® screening tool for workplace issues includes securities drawn from a universe of the largest 1000 US companies. Companies that fail Calvert's workplace issues criteria do so because they:
- Have a pattern of violating fair labor practices or safety and health regulations,
- Are subject to serious action by the Occupational Safety and Health Administration or other US regulatory agencies,
- Exhibit a pattern of anti-union practices, or
- Violate fundamental international labor standards blatantly.
Advocacy
Calvert will continue to focus on strengthening labor rights and workplace safety performance across key industries and their global supply chains. The key to Calvert's advocacy success is combining a consistent focus with the rich mix of advocacy tools and the many channels at our disposal. These include direct company dialogues, shareholder resolutions, industry standard-setting exercises, and public policy and regulatory advocacy.
As part of our advocacy in this area, Calvert is developing a stronger relationship with unions and labor organizations that represent farm workers in the United States. We are especially concerned that US farm workers are vulnerable to unfair labor practices, union busting, exposure to pesticides, and other workplace problems. In addition, US fresh food suppliers often impose layers of contracting and subcontracting relationships between the farm worker and the final supplier, hampering transparency and protection of worker rights. We are in the first stages of asking major food and restaurant corporations to favor suppliers that negotiate in good faith with unionized workers, and to adopt better codes of conduct to protect worker rights.
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